4. Investments in Real Estate

As of June 30, 2014, our portfolio consists of eleven properties which were 100.0% leased. The following table provides summary information regarding our properties.

Property ⁽¹⁾	Location	Date Purchased	Square Footage		Purchase Price		Debt		June. 30, 2014 % Leased

Sheridan Care Center	Sheridan, OR	August 3, 2012		13,912	$	4,100,000	$	2,760,000		100.0	%
Fern Hill Care Center	Portland, OR	August 3, 2012		13,344		4,500,000		2,957,000		100.0	%
Farmington Square	Medford, OR	September 14, 2012		32,557		8,500,000		5,718,000		100.0	%
Friendship Haven Healthcare and Rehabilitation Center ⁽²⁾	Galveston County, TX	September 14, 2012		56,968		15,000,000		10,548,000		100.0	%⁽⁵⁾
Pacific Health and Rehabilitation Center	Tigard, OR	December 24, 2012		25,082		8,140,000		6,062,000		100.0	%
Danby House	Winston-Salem, NC	January 31, 2013		26,703		9,700,000		7,275,000		100.0	%
Brookstone of Aledo⁽³⁾	Aledo, IL	July 2, 2013		49,420		8,625,000		5,850,000		100.0	%
The Shelby House	Shelby, NC	October 4, 2013		23,074		4,500,000		3,375,000		100.0	%
The Hamlet House	Hamlet, NC	October 4, 2013		34,638		6,500,000		4,830,000		100.0	%
The Carteret House	Newport, NC	October 4, 2013		29,570		4,300,000		3,195,000		100.0	%
Sundial Assisted Living⁽⁴⁾	Redding, CA	December 18, 2013		26,081		3,500,000		—		100.0	%
Total:				331,349	$	77,365,000	$	52,570,000		100.0	%

⁽¹⁾	The above table excludes Sherburne Commons Residences, LLC (“Sherburne Commons”), VIE for which we became the primary beneficiary and began consolidating its financial results as of June 30, 2011. As of October 19, 2011, Sherburne Commons was classified as held for sale (See Note 16).

⁽²⁾	We terminated the lease with the operator of this facility on March 16, 2014 and became the licensed operator of the facility on May 1, 2014 through a wholly- owned taxable REIT subsidiary (see Friendship Haven Taxable REIT Subsidiary).

⁽³⁾	Formerly known as Heritage Woods of Aledo.

⁽⁴⁾	Formerly known as Redding Assisted Living.

⁽⁵⁾

The Friendship Haven facility is currently being operated by a wholly-owned subsidiary of the Company.

As of June 30, 2014, adjusted cost and accumulated depreciation and amortization related to investments in real estate, including the CHP LLC acquisitions, and excluding assets of variable interest entity held for sale, were as follows:

Healthcare	Land		Buildings and Improvements		Furniture and Fixture		Total
Investments in real estate	$	6,502,000	$	65,046,000	$	6,393,000	$	77,941,000
Less: accumulated depreciation and amortization		—		(2,713,000)		(1,571,000)		(4,284,000)
Net investments in real estate	$	6,502,000	$	62,333,000	$	4,822,000	$	73,657,000

Friendship Haven Taxable REIT Subsidiary

Beginning in January 2014, the tenant/operator of the Friendship Haven Healthcare and Rehabilitation Center stopped paying rent payments due to us under the lease agreement. On March 16, 2014, we terminated the lease agreement. Effective May 1, 2014, we became the licensed operator of the facility through a wholly-owned taxable REIT subsidiary. Upon becoming the licensed operator of the facility, we entered into a management agreement with an affiliate of Stonegate Senior Living. We plan to operate the facility until a long-term lease agreement can be secured with a financially stable tenant/operator. We are seeking to secure a long term triple net lease with an operator in 2014.

Impairments

We conduct a comprehensive review of our real estate assets for impairment. We recorded no impairment charges related to properties held and used for the six months ended June 30, 2014 and 2013.

Real Estate Held for Sale

We sold our remaining industrial assets in 2013. Consequently, we reclassified these properties to real estate held for sale and their financial operations to discontinued operations for the first quarter of 2013. When assets are classified as held for sale, they are recorded at the lower of carrying value or the estimated fair value of the asset, net of estimated selling costs. For the quarters ended June 30, 2014 and 2013, we recorded no recoveries or impairments to real estate held for sale.

See Note 16 for discussion of amounts recorded in discontinued operations.

Leasing Commissions

Leasing commissions are capitalized at cost and amortized on a straight-line basis over the related lease term. As of June 30, 2014 and December 31, 2013, the unamortized balance of capitalized leasing commissions was $1.9 million and $2.4 million, respectively. The amortization of the Friendswood Facility’s leasing commission totaling $0.4 million was accelerated due to the lease termination on March 16, 2014. Amortization expense for the three months ended June 30, 2014 and 2013 was $40,000 and $34,000, respectively. Amortization expense related to capitalized leasing commission for the six months ended June 30, 2014 and 2013 was $449,000 and $66,000, respectively.